Warner Bros. Discovery boss David Zaslav vowed to not “overspend” to grow its streaming footprint, days after it shuttered CNN’s nascent streaming service, CNN+.
Zaslav, who helms the newly formed media giant WBD, home to CNN, Warner Bros. TLC, HBO and Food Network, said he is moving fast to cement his vision of merging the company’s main streamers Discovery+ and HBO Max into one service.
“We will clearly take swift and decisive actions on certain items, as you saw on CNN+ last week,” he told investors on an earnings call Tuesday, referring to the decision to close the service a month after launching.
The service cost the company $300 million prior to launch with an additional $700 million earmarked by to get it going. The massive investment didn’t justify the paltry subscriber growth, Zaslav said.
A prudent operator, Zaslav has said he plans to shore up at least $3 billion in cost savings from the $43 billion merger between Discovery and WarnerMedia, which was recently renamed Warner Bros. Discovery. Unlike rivals like Netflix, which has spent wildly on new shows in order to attract subscribers, the ceo said, he will take a more cautious approach.
“We are not trying to win the direct-to-consumer spending war,” he said, adding that the company would “invest in scale smartly.”
“Everything should be monetized,” Zaslav said, adding that “each and every decision will be made through the lens of analyzing asset value,” with a focus on “maximizing shareholder value, not just subs.”
According to the company, at the end of the first quarter, HBO Max and HBO, home to shows like “Euphoria” and “Game of Thrones,” has 76.8 million subscribers, while Discovery+, which includes shows like the “90 Day Financé” franchise and “Property Brothers,” reached 24 million subscribers.
The two services will be combined to combat the likes of Disney+, which has around 129.8 million subscribers, and streaming leader Netflix, which recently reported a first-time loss in subscribers for a total of 221.6 million customers.
News of Netflix’s rare slip caused the streaming giant to consider adding advertising and to crackdown on password sharing to maximize it subscriber numbers even as it intends to shell out $18 billion on content spending this year.
On the call Zaslav boasted that Discovery was “out there early” on incorporating advertising, adding his company was “not going to have to write a check to get the best content because we have the factory.”
He said Discovery saw its first-quarter net income rise to $456 million, or earnings per share of 69 cents, from $140 million, or 21 cents a share, in the year-ago period, thanks to a decline in operational expenses. Revenue jumped 15%, to $3.16 billion. Last week, AT&T, which spun off WarnerMedia to Discovery, reported WarnerMedia’s earnings for the last time. Zaslav will present the combined WBD’s second quarter earnings in August.
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